Winners And Losers Of Q3: Entegris (NASDAQ:ENTG) Vs The Rest Of The Semiconductor Manufacturing Stocks

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Entegris (NASDAQ:ENTG) and the rest of the semiconductor manufacturing stocks fared in Q3.

The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.

The 14 semiconductor manufacturing stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.

While some semiconductor manufacturing stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.5% since the latest earnings results.

Weakest Q3: Entegris (NASDAQ:ENTG)

With fabs representing the company’s largest customer type, Entegris (NASDAQ:ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.

Entegris reported revenues of $807.7 million, down 9.1% year on year. This print fell short of analysts’ expectations by 3%. Overall, it was a disappointing quarter for the company with revenue guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ adjusted operating income estimates.

Bertrand Loy, Entegris’ president and chief executive officer, said: “The team delivered margins and non-GAAP EPS within our guidance range, despite third quarter sales coming in below expectations, with revenue growth excluding divestitures of 7 percent year-on-year.”

Entegris delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 7.6% since reporting and currently trades at $99.07.

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Best Q3: Marvell Technology (NASDAQ:MRVL)

Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.

Marvell Technology reported revenues of $1.52 billion, up 6.9% year on year, outperforming analysts’ expectations by 4%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.

The market seems happy with the results as the stock is up 15% since reporting. It currently trades at $110.40.

Kulicke and Soffa (NASDAQ:KLIC)

Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices

Kulicke and Soffa reported revenues of $181.3 million, down 10.4% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a softer quarter as it posted revenue guidance for next quarter missing analysts’ expectations.

The stock is flat since the results and currently trades at $47.

Lam Research (NASDAQ:LRCX)

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Lam Research reported revenues of $4.17 billion, up 19.7% year on year. This result topped analysts’ expectations by 2.7%. It was a very strong quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.

The stock is down 1.2% since reporting and currently trades at $72.16.

Teradyne (NASDAQ:TER)

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Teradyne reported revenues of $737.3 million, up 4.8% year on year. This print surpassed analysts’ expectations by 3%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 1.6% since reporting and currently trades at $126.52.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

This content was originally published on Stock Story